Alpari - Analytics

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Evening Expects to See Dollar Downward Correction

European trades have seen the euro/dollar fall lower than yesterday’s 1.0780 minimum. The euro has weakened to 1.0751 due to weak Eurozone stats, whilst ignoring strong German labour market data. Eurozone inflation didn’t meet forecasts.

Preliminary Eurozone CPI for December was set at 0.2% YoY (forecasted: 0.3% YoY, previous: 0.2% YoY). The base index was 0.9% YoY (forecasted: 1.0% YoY, previous: 0.9% YoY).

The number of unemployed in Germany for December fell by 14k (forecasted: fall of 6k, previous: fall of 14k). The German unemployment level for December stood at 6.1% (previous: 6.0%).

The UK pound was under pressure due to the strengthening of the dollar against most of its counterparts. The pound/dollar fell to 1.4658, despite strong UK construction sector PMI data coming out which showed a December increase from 55.3 to 57.8 (forecasted: 56.0).

Although, once the European stats were out, people started buying pound for euro. The euro/dollar is updating minimums, the pound/dollar is stabilising at 1.4660. The euro/dollar on the hourly is digging its heels in at the support. There is a good chance that we’ll see a return to 1.0795/1.0800. If a correction begins on dollar pairs, the pound/dollar will restore to 1.4722.


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